Knowledge integration has been theorised at the levels of organisations and inter-organisational dyads. However, no theory exists yet of the integration of knowledge from an organisation's environment. This paper addresses this void in the literature by presenting a theory of external knowledge integration. It considers organisations as open systems confronted with intra-organisational, inter-organisational, and extra-organisational knowledge heterogeneity. It presents a prescriptive theory of how organisations should deal with these three levels of heterogeneity by three external knowledge integration capabilities: knowledge identification, knowledge acquisition, and knowledge utilisation. The paper develops propositions of how organisations should balance divergent and convergent external knowledge integration capabilities to achieve flexibility, efficiency, and scope. As such, the paper builds further on Grant's seminal work and provides a prescriptive theory of external knowledge integration